Suffolk. Civil action commenced in the Supreme Judicial Court for the county of Suffolk on November 22, 1976. The case was heard by Kaplan, J.
Hennessey, C.j., Quirico, Braucher, & Wilkins, JJ.
Insurance, Commissioner of Insurance, Receivership of insurance company.
The opinion of the court was delivered by: Braucher
An insurance company's capital is impaired if its net assets are less than its stated capital. [475-476]
The Commissioner of Insurance was not required to grant an insurance company a three-month period to make its capital good or reduce it under the provisions of G. L. c. 175, §§ 6, 69-71, where it did not appear that the company could with safety to the public and its policyholders be permitted to continue to transact business. 
Evidence in a proceeding against an insurance company under the provisions of G. L. c. 175, § 6, warranted the appointment of a receiver for the company and an order enjoining it from transacting further business. [476-478]
There was no merit to an insurance company's contention that it was denied due process of law in an action by the Commissioner of Insurance for appointment of a receiver. 
Pursuant to G. L. c. 175, § 6, a single Justice of this court concluded that the capital of the defendant insurance company is impaired, that it cannot with safety to the public and its policyholders be permitted to continue to transact business, and that its condition is such as to render its further transaction of business hazardous to the public, its policyholders and creditors. He issued a permanent injunction and appointed a permanent receiver. The defendant appeals, and we affirm.
The defendant was incorporated as an insurance company in 1971 and was capitalized at $1,000,000. In 1972 the Commissioner of Insurance (Commissioner) commenced a rehabilitation proceeding against the defendant under G. L. c. 175, § 180B; the proceeding was terminated by stipulation in 1973. The requirements of that stipulation, which in the main have been met, included a requirement that the defendant confine its business to the writing of fidelity and surety lines of insurance under G. L. c. 175, § 47, Fourth. Late in 1975 the deputy commissioner of insurance initiated an investigation of the defendant, which culminated in a special report as of August 31, 1976, and October 31, 1976.
On November 22, 1976, the Commissioner commenced the present proceeding before a single Justice of this court, and a temporary injunction and an order appointing a temporary receiver were entered ex parte the same day. Later the temporary receivership was continued by agreement, and the matter was referred to the Superior Court for hearings, findings of fact and a report. The Superior Court Judge's report, filed January 6, 1977, concluded that the defendant's net assets were not substantially greater than the Commissioner had indicated in his report, that the defendant had a significant and dangerous number of unpaid claims, that the assumption of new risks would pose a hazard to the public, and that the defendant's capital was seriously impaired. The order appealed from was entered by the single Justice on March 15, 1977.
The defendant has presented us with a record appendix of eighty-nine pages, with no table of contents or index, contrary to Mass. R. A. P. 18 (d), as amended, 367 Mass. 920 (1976). It has also submitted a brief of sixty-six pages. An addendum to the brief, again without table of contents or index, reproduces thirty-seven pages of the record appendix. The defendant asks us to review more than 500 pages of transcript and voluminous exhibits to determine whether the findings, on which the Commissioner, the Judge in the Superior Court and the single Justice agreed, are supported by the evidence. We have done so, but no useful purpose would be served by a detailed account of the defendant's financial situation.
1. Impairment of capital. The defendant contends that its net assets exceed $200,000, and that its capital is therefore not impaired. The defendant, however, was capitalized at $1,000,000, and its capital has not been reduced in accordance with G. L. c. 175, § 71. We think that its capital is impaired if its net assets are less than its stated capital of $1,000,000. The Commissioner claims that the defendant's liabilities exceed its assets by $96,600, while the defendant asserts that its assets exceed its liabilities by $435,400. Under G. L. c. 175, §§ 6, 69-71, a demand that the capital be made good is authorized if there is impairment to the extent of one-quarter or more, that is, if net assets do not amount to more than three-fourths of the company's capital. No theory is presented to us on which the defendant's net assets amount to $750,000, three-fourths of its capital.
The $200,000 figure is found in G. L. c. 175, § 48: an insurance company formed to transact business under G. L. c. 175, § 47, Fourth, must have paid-up capital in an amount not less than $200,000. There was testimony that in 1971 the Commissioner required another $200,000 as surplus, and that he now requires $400,000 as surplus in addition to $200,000 as capital. Those requirements, however, relate to the amount of capital at the time the company is organized. ...